SAP’ aims to unify data for AI, analytics with new Business Data Cloud

With its new Business Data Cloud, SAP wants to help enterprises unify data held in its own systems with that in other vendors’ applications: It’s goal is to expedite advanced analytics and AI use cases.

As part of Business Data Cloud (BDC), SAP is offering a “zero copy” mechanism to help enterprises run advanced data analytics and modelling without having to move data outside of the SAP environment or copy and bring back data to SAP from external sources, said Irfan Khan, chief product officer of SAP Data and Analytics.

This should help enterprises with AI use cases and reduce cloud egress costs, said IDC SVP of industry, software, and services research Bob Parker.

Another key component of BDC is its native integration with Databricks, enabling customers to access machine learning, data science, and AI capabilities such as Mosaic AI, Databricks SQL, and Unity Catalog inside SAP.

SAP Business Data Cloud — an evolution of Datasphere

SAP’s Khan said that Business Data Cloud is an evolution of SAP Datasphere, the company’s data warehouse product introduced in 2023 and later expanded with new governance features.

But there are differences between the two, he  said: Although both aim to unify SAP and non-SAP data in a single layer, Datasphere is a platform-as-a-service (PaaS), managed by the customer, whereas Business Data Cloud is software-as-a-service (SaaS), a combination of Datasphere and other functions managed by SAP.

What that means is that enterprises will have access to SAP managed data products that are fully curated with lifecycle management, Khan explained, adding that these data products will also show up within the catalog of Datasphere, which can also be shared with Collibra and now with Databricks’ Unity Catalog.

Although enterprises can continue using Datasphere for now, SAP clearly wants them to move to Business Data Cloud.

“We will offer flexible mechanisms allowing customers to seamlessly transition their solutions both commercially and technically,” an SAP spokesperson said, adding that existing Datasphere customers should upgrade to BDC.

SAP plans to make BDC generally available early in the second quarter.

Insight apps, new agent builder and Joule agents

As an extended part of the BDC offering, SAP said that it will offer Insight apps — ready-to-use analytical applications for lines of businesses such as sales or finance.

These applications will be built on top of unified data and AI models generated from within the BDC, SAP’s Khan explained.

Additionally, SAP released several new ready-to-use new Joule agents across finance, sales, and service functions, and said it will offer tools with which enterprises can build agents underpinned by unified data from BDC.

Why is SAP partnering with Databricks for the Business Data Cloud?

SAP executives said the company has a lot of customers in common with Databricks — but analysts said the synergies aren’t just in their go-to-market approach.

“Databricks has addressed the semantics and metadata requirements of SAP head on, which is notoriously difficult for customers in terms of data pipelines and interoperability,” said Michele Goetz, principal analyst at Forrester. The partnership enables enterprises using BDC to take advantage of AI and data science within having to move data out of their SAP footprint, she said, adding that SAP may also be hoping the partnership will accelerate uptake of the AI features in its own platform.

But John Bratincevic, another principal analyst at Forrester, sees the partnership — and BDC’s zero-copy capability — at least in some part as a response to Salesforce’s recent pitch.

“The pitch has been, we have your data, we can ‘magically’ get the data we don’t have, and since you (enterprises) trust us, use our platform to deliver AI,” Bratincevic said.

What Bratincevic refers to as magically getting the data is essentially Salesforce’s bi-directional zero copy ability courtesy of the Zero Copy Partner Network it launched last year with support for integration with its data cloud.

SAP has said that it might expand its partnership with other software vendors over time.

However, David Menninger, executive director at ISG, said that the partnership with Databricks is more likely to be unique.

While SAP’s partnership with Collibra on Datasphere was at arms-length, he said, “The BDC relationship with Databricks is an OEM relationship. This means that a Databricks license is included in the purchase.” That, he said, makes it highly unlikely SAP will form OEM relationships with other vendors.

Getting ready for agentic wars?

Analysts also said that SAP’s strategy to champion BDC as the foundational data layer is another step towards getting ready for the agentic wars — a phase where rival vendors such as Salesforce, Oracle, Microsoft, Workday, and ServiceNow, among others will try to get a majority share of enterprises’ expenditure.

“Enterprises are already using multiple products across their businesses. If an enterprise uses both Salesforce and SAP across different departments, the real question is which agentic offering are they going to choose: Agentforce or Joule? That’s what vendors are preparing for,” IDC’s Parker explained.

As for competition in other domains, SAP executives said the company is not planning to compete with other data platform providers such as Snowflake or any of the hyperscalers. Rather, they said that they want to help enterprises unlock the value of their data by providing a unified data layer and tooling on top to unearth insights.

For Databricks, the partnership with SAP is a growth play. “SAP has hundreds of thousands of customers with significant amounts of business-critical enterprise data. As a consumption model business, access to this new data will help us grow a larger share of the data market,” said Shanku Niyogi, VP of product management at Databricks.